Summary: Markets extended their advance this week, with broad participation across sectors, improving market internals, strong small-cap leadership, bullish seasonal trends, and nearly all major risk indicators remaining in positive territory. While the overall backdrop remains constructive, investors should continue monitoring weaker volume trends, elevated volatility, growth’s test of key support levels, and the relative strength of defensive assets such as bonds and utilities for signs of a potential shift in market character.

Risk On

• Markets put in a strong week with all indexes up, S&P testing and rejecting its 50-Day Moving Average and small caps surging to new highs. (+)
• Sectors were up across the board with the exception of energy and really strong moves in technology and retail. (+)
• Market internals flipped positive this week across the board. The cumulative advance decline for NASDAQ is still well off recent highs. (+)
• The color charts (moving average of stocks above key moving averages) are showing positive readings in the S&P and IWM, with a bit more neutral reading in QQQ.(+) 
• The 52-Week new high new low looks strong with slopes moving positive in S&P. (+)
• The modern family looks explosive with all members in a bull phase and all outperforming the S&P on triple play. (+)
• Emerging and developed markets both performed in-line with US markets and are both still in bull phases. (+)
• Soft commodities remain under pressure in a distribution phase showing easing inflationary pressures. (+)
• Broader Seasonal trends remain quite bullish for equities. (+)
• Volatility came off its recent highs, though remains elevated from its most recent lows last week. A weak risk on read. (=)

Neutral

• The 52-Week new high new low looks neutral with slopes moving slightly positive in NASDAQ. (=)
• Risk gauges remained at 40% with the strength in rates and utilities relative to the SPY. (=)
• With short-term weakness in growth and value outperforming and hitting new highs, we see some short-term pressure even as both are still in bull phases long-term. One key to watch is if growth breaks its 50-Day Moving Average. (=)
• Gold broke down under its 200-Day Moving Average and key support, although it has a short term reversal pattern (bullish engulfing). (=)
• Oil is testing the lower end of an upwardly rising channel. (=)
• Bitcoin needs to hold last week’s low (around the 200-Day Moving Average). (=)
• Despite all the negative news, rates eased this week and TLT’s crossed above its 50-Day Moving for the first time since early March, remaining a neutral influence on this market. (=)

Risk Off

• Despite the strength in markets Volume skewed significantly risk-off with nearly no accumulation days in the last 10 in SPY and QQQ. (-)

Actionable Trading Plan

• Maintain a risk-on bias as the majority of market evidence remains positive.
• Stay fully invested or overweight equities, particularly while the S&P remains above its 50-day moving average and market internals continue to improve.
• Favor areas showing the strongest relative strength, including technology, retail, and small caps.
• Continue to hold positions in both U.S. and international equities as developed and emerging markets remain in bull phases.
• Use normal pullbacks as opportunities to add exposure rather than reasons to become defensive.

Key Levels and Indicators to Monitor

• Watch for a break of the 50-day moving average in growth stocks, which would be an early warning sign of deteriorating market leadership.
• Monitor volume closely. The recent rally has lacked accumulation days, making volume the primary concern in an otherwise healthy market.
• Watch whether risk gauges can improve from the current 40% level toward more bullish readings.
• Continue monitoring bonds, utilities, and interest rates for signs that capital is rotating toward defensive assets.
• Watch Bitcoin's recent low and oil's rising channel support for clues about broader risk appetite.

Risk Management

• Maintain existing stops and continue raising trailing stops on profitable positions.
• Avoid aggressively chasing extended positions after the recent strong advance.
• Keep a modest cash reserve available for pullbacks into support.
• If market breadth weakens materially, growth breaks support, or volume continues to diverge negatively, reduce exposure incrementally rather than making wholesale portfolio changes.

Current Stance: Moderately Bullish

• Equity Exposure: Above Neutral
• Cash: Moderate
• Risk Management: Active
• Preferred Action: Buy pullbacks, hold winners, and let the trend continue until the evidence changes.